NREL Teams with Berkeley Lab to Analyze Solar Pricing Trends

According to a new analysis by NREL and Berkeley lad, downward pricing for solar energy is expected to continue with soft costs making 40 to 50 percent of residential and commercial PV prices.

Dec 05, 2012

The National Renewable Energy Laboratory (NREL) and the Lawrence Berkeley National Library (LBL) have jointly released two reports that examine solar photovoltaic (PV) pricing in the U.S.

The first report investigates the progress in PV price reductions to help PV stakeholders manage the transition to a market-driven PV industry and to provide clarity surrounding the wide variety of potentially conflicting data available about PV system prices. The report also tracks the progress toward the SunShot goals of reducing the installed cost of solar energy systems by roughly 75 percent between 2010 and 2020.

“There is often confusion when interpreting estimates of PV system prices,” NREL Solar Technology Financial Analyst David Feldman said. “This report helps to clarify this confusion by bringing together data from a number of different sources and clearly distinguishing among past, current, and near-term projected estimates.”

The report indicates that while data sources, assumptions, and methods differ substantially between the bottom-up analysis and the reported price analysis, the results support the validity of both analyses and provide a consistent perspective on system pricing. The report also shows that U.S. PV system prices have been falling rapidly for the past decade, and are likely to continue their downward trend through 2012 and into 2013.

The second report is the result of data collection and analysis of non-hardware balance-of-system costs — often referred to as “business process” or “soft” costs. The four categories studied were customer acquisition, permitting, inspection, and interconnection, installation labor, and labor associated with arranging third-party financing.

“These soft costs present significant opportunities for further cost reductions and labor-productivity gains,” NREL Solar Technology Markets and Policy Analyst Kristen Ardani said. “Benchmarking and tracking these costs will help with the development of policies and practices aimed at reducing cost inefficiencies.”